Utilities Appeal Millions In Fines For 2011 Storms

Power companies urged the state's highest court Monday to overturn nearly $25 million in penalties imposed by Massachusetts regulators after a pair of 2011 storms, both of which left hundreds of thousands of customers in the dark - some for over a week.

The record fines were the first imposed under a state law that, for the first time, authorized the Department of Public Utilities to impose monetary penalties on utilities for inadequate storm preparation and response.

The agency fined National Grid $18.7 million for Tropical Storm Irene in August 2011 and for a rare October snowstorm. NStar was fined $4.1 million for the two storms and Western Massachusetts Electric Co. $2 million for the snowstorm only.

The Supreme Judicial Court took the appeals under advisement after hearing arguments Monday.

In separate court filings, the companies said regulators failed to conduct a proper review and did not present enough evidence to justify their findings, sometimes relying more on opinion than fact.

The storms had a "catastrophic impact" on the overhead electric system and given the severity of damage National Grid acted "diligently and reasonably to restore service safely and promptly," the company argued.

But the state said in a brief filed with the high court that the utility's restoration efforts violated several standards set by the department. The company took, on average, 22 hours to respond to reports of downed power lines, and failed to provide frustrated customers and local officials with timely information on when they might expect power to be restored, regulators said.

National Grid was also singled out by DPU for not securing enough crews in advance of the storms. In the case of Irene, the company noted that importing out-of-state crews was difficult because the storm wreaked havoc across much of the eastern United States.

NStar was also cited by DPU for slow response to downed wires and failing to communicate with municipal officials on a timely basis.

Western Massachusetts Electric's actions after the October snowstorm largely lived up to standards, DPU said, but the company was faulted for poor response to emergency calls, including taking a full day to respond to a downed power line that had melted a sidewalk.

"These fines sent a clear message that customers deserve better in future storms, and we believe strongly that maintaining the ability to levy these fines is critical to holding utilities accountable on behalf of ratepayers," Attorney General Martha Coakley, whose office argued the case for DPU, said in a statement Monday.

In addition to the 2009 law that authorized financial penalties for slow service restoration, the Legislature also approved a measure in 2012 requiring that any fines paid by utilities be returned to customers in rate relief.